Deaths linked to Monster energy drink
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The U.S. Food and Drug Administration said on Monday that it was investigating reports of five deaths that may be associated with Monster Beverage Corp's namesake energy drink, and the company's shares fell more than 14 percent.
Monster is also being sued by the family of a 14-year-old Maryland girl with a heart condition who died after drinking two cans of its Monster energy drink in a 24-hour period.
Monster, the top-selling energy drink in the United States, said it does not believe its energy drink was in any way responsible for the girl's death.
Still, the lawsuit and reports of other deaths could escalate calls from critics including two U.S. senators and the New York attorney general about the safety of the beverages and the way they are marketed.
The highly caffeinated drinks with aggressive-sounding names like Monster, Red Bull, Rockstar, AMP and Full Throttle are often associated with active or extreme sports, which makes them especially popular among young men.
They are the fastest-growing type of soft drink in the United States, with sales increasing 17 percent last year to about $9 billion, according to Beverage Digest.
With double-digit growth through the third quarter of 2012, Beverage Digest Editor John Sicher said he expects energy drink sales to exceed $10 billion this year. He declined to speculate about future growth.
I don't think they are going to ban energy drinks, said Morningstar analyst Thomas Mullarkey. The question arises whether or not it gives them more firepower for increased regulation.
That could mean more extensive labeling requirements or age restrictions, Mullarkey said. He added that the headlines also made Monster a less attractive takeover target.
This really reduces the likelihood that Coke would want to acquire Monster, Mullarkey said. Sources told Reuters in April that the two companies had discussed a possible deal as recently as last year.